Russia is an Imperialist Country

The present world situation is defined by a system of
capitalist-imperialist relations, and the principal contradiction on the
global scale is between imperialist states and oppressed peoples. In
Imperialism, the Highest Stage of Capitalism Lenin put forward a Marxist
analysis of the nature of capitalist-imperialism, and it is to this
document that we shall refer, so as to understand the nature of the
contemporary inter-imperialist conflict.

It is important that we not fetishize armed conflict as the determining
factor in assessing whether a country is an imperialist power. Lenin is
quite clear that the military conflicts between imperialist powers are a
result of the economic and political struggle between them. In his
numerous discussions of World War I, he repeatedly referred to Carl von
Clausewitz’s idea that “War is a continuation of politics by other
means.”1 Therefore, we will repeat Lenin’s claim that “unless this
[the economic essence of imperialism] is studied, it will be
impossible to understand and appraise modern war and modern politics.”

So, what then is the economic essence of imperialism? It is the
concentration of capital in monopolies, the fusion of banking and
industrial capital into finance capital, the export of capital abroad,
and the struggle between imperialist powers to repartition the world
markets (which eventually and inevitably leads to war between
imperialist powers). Russia exhibits all of these features, and is
therefore a capitalist-imperialist country. This article offers some
analysis of the Russian state and its role in the inter-imperialist
conflicts around the world.

The Concentration of Capital in Russia

In Russia there is an extreme concentration of capital, to a degree that
exceeds the imperialist powers of Lenin’s time. As Maoists we should be
clear, that contemporary Russian imperialism was built upon the
concentration of capital that existed in the Social-Imperialist USSR.
The vast majority of this capital was not destroyed after the collapse
of the USSR, but rather reorganized and concentrated in a small number
of hands. The US-led imperialist bloc tried to seize control of this
formation, but was unable to, which allowed the new bourgeoisie in the
USSR to transform, in part, into an independent national bourgeoisie,
independent from foreign domination and able to pursue imperial aims.

Based on the official statistics of the Russian state, the top 600 firms
in Russia account for over 70% of Russia GDP.2 In Imperialism Lenin
analyzed the concentration of production in a number of the imperialist
countries at the time. Based on the statistics available to him, he
demonstrated the economic basis of imperialism in the United States,
where in 1909, the largest 3,060 firms accounted for 43.8% of the total
GDP. From this it is clear that the concentration of capital in Russia
today is much greater than it was in the US in the early 20th century.
Thus, Russia clearly has the concentration of capital necessary to
provide the economic foundation of imperialism.

Finance Capital in Russia

In Russian industry we can see a clear fusion of banking and industrial
capital into finance capital. Lenin described this process:

“As banking develops and becomes concentrated in a small number of
establishments, the banks grow from modest middlemen into powerful
monopolies having at their command almost the whole of the money capital
of all the capitalists and small businessmen and also the larger part of
the means of production and sources of raw materials in any one country
and in a number of countries. This transformation of numerous modest
middlemen into a handful of monopolists is one of the fundamental
processes in the growth of capitalism into capitalist imperialism.”

To demonstrate the degree of centralization of capital in the big German
banks by 1913, Lenin showed that the ‘Big 9’ banks in Germany together
controlled just under 50% of the total deposits in Germany. Today,
Sberbank is the largest bank in Russia, and the 3rd largest bank in
Central and Eastern Europe.3 It has an annual operating income of 28 billion USD, and
deposits totaling 312 billion USD.4 This amounts to approximately 36%
of the total deposits in Russia (849 billion USD5) concentrated in a
single financial institution. The breakdown of the deposits, and their
share of the total, of the five biggest banks (by total assets) in
Russia today is as follows:

So we can clearly see that finance capital is a powerful force in
Russia, with large financial institutions concentrating large amounts of
capital, and large percentages of all the capital in the country. What’s
more the concentration of capital in Russia exceeds that of many of the
imperialist powers in Lenin’s time. This concentration of capital in the
big banks changes their role, from simply functioning as payment
intermediaries to playing a key role in planning and directing the
economy as a whole, deciding which resources to extract, which companies
to fund, which to avoid, and so on. This necessarily arises due to the
concentration of capital, and the decreasing availability of credit from
any other sources.

The executives (or at least the marketing team) of Sberbank are quite
up-front about this on their ‘About’ page, saying that Sberbank is “the
circulatory system of the Russian economy, accounting for one third of
its banking system. The Bank provides employment and a source of income
for every 150th Russian family.” and “the Bank is the key lender to the
Russian economy and the biggest receiver of deposits in Russia.”
Sberbank holds 44.9% of retail deposits, and issues 37.7% of retail
loans and 32.7% of corporate loans in Russia.11 We can see clearly
that finance capital exists in Russia, and is well-developed, with the
majority of the banking market and capital controlled by a few very
large firms which direct the affairs of the rest of the enterprises.

As another example, consider the Russian state-owned gas company
Gazprom, which is also the largest company in Russia by revenue. Gazprom
was originally created in 1989 when the Soviet Ministry of Gas and
Industry was privatized, and has grown significantly since that point.
Gazprom has annual revenues in excess of $100 billion and has a
significant financial and investment wing.12 As we see above, one of
its financial subsidiaries, Gazprombank, has the third most deposits of
any bank in Russia, indicating the degree to which banking and
industrial capital are fused internal to Gazprom.

Gazprom also has an effective monopoly in the gas industry in Russia
(accounting for 83% of gas production in Russia, and 17% of the gas
production in the whole world) and also has significant holdings in
media, oil production, and other sectors. Gazprom is just one example of
many finance-capital firms in Russia (others include LUKoil, the 10th
largest oil company in the world13, and Sberbank). All of this
definitively indicates that Russia also has the fusion of industrial and
banking capital into monopoly finance-capital firms necessary to
constitute an imperialist country.

The Export of Capital by Russian Firms

These large firms in Russia also export significant amounts of capital
abroad. A few examples: Gazprom has subsidiaries in 36 countries outside
of Russia, in 2016 Rosfnet (the 3rd largest company in Russia14)
purchased a 98% stake in the India-based oil company Essar Oil for
~$13 billion,15 and overall Russian direct investment abroad
exceeds $440 billion.16 While this pales in comparison the ~$5
trillion that the US has in foreign direct investment abroad, it still
represents a significant export of capital.

It is also important to consider the overall picture of capital flowing
into and out of a country, summed up by a set of figures called
international investment position, which captures the assets, such as
direct investments, as well as stocks, bonds, and other investments
which are not counted as ‘direct investment,’ and all liabilities. This
figure shows that Russia currently has about $1.2 trillion invested
abroad,17 with a ‘net’ IIP (balance of assets vs liabilities) of over
$200 billion. This means that, on balance, Russian capitalists are net
exporters of capital, and that, while the sums involved are modest
compared to that of the US, it is clear that capital is being profitably
exported around the world from Russia.

As a concrete example of capital export we can look at the acquisitions
that Russia’s largest bank, Sberbank, has made in the past few years.
According to their website, Sberbank counts 70% of Russian population
among its customers.18 This is clearly a massive market share, but
the bank has its sights set on breaking into other markets and expanding
its presence, especially in central and eastern Europe. To this end, in
2011 it acquired a 100% stake in Volksbank International AG19, an
Austrian bank which subsequently changed its name to Sberbank Europe
AG20. This transaction, conducted for between €585 and €64521
million, was Sberbank’s first acquisition outside of the former USSR.
The CEO of Sberbank, Herman Gref, said of the deal that “This will
give us access to the attractive and growing markets of Central and
Eastern Europe, and it will serve as a platform for organic growth and
further acquisitions in the region.”22 He wasn’t
exaggerating, since the Volksbank International group (with its
subsidiaries) was counted among the top 10% financial institutions in
several countries, including Bosnia and Herzegovina, Croatia, Czech
Republic, and Slovenia.

The next year, no doubt looking to diversify and push into other
markets, Sberbank made a deal to purchase the Turkish bank DenizBank for
$3.5 billion USD23, allowing for similar expansion in that
market. Although Sberbank has also made significant domestic
acquisitions, including paying $1 billion USD for the investment bank
Troika Dialog in 201124, it is clear that expansion into
foreign markets via acquisitions is the bank’s key strategy for expanding
market share and ensuring consistent profits.

The Struggle Between Imperialist Powers

In recent years the contradictions between Russian imperialism and the
US led imperialist bloc have sharpened. This is most evident in the
Syrian Civil War, and the ongoing crisis in the Ukraine; however, it is
also apparent in the shifting situation in Turkey, in the Italian and
Hungarian governments’ opposition to the automatic renewal of sanctions
against Russia, and in Rodrigo Duterte’s overtures to Moscow. All of
these are concrete instances of the struggle between rival imperialist
powers to redivide a world that has already been divided up. In
particular, the shifting allegiances of client-states which were
formally consolidated to the camp of US/European imperialism are a sign
of the growing power of emerging imperialist states such as China and
Russia.

While there has been much discussion of the trend of globalization since
2000, Lenin was clear that by the beginning of the 20th century
capitalism was a global system: “For the first time the world is
completely divided up, so that in the future only redivision is
possible, i.e., territories can only pass from one “owner” to another,
instead of passing as ownerless territory to an owner.”25
Monopoly-capitalist blocs, whose interests shape the foreign policy of
imperialist states, have a major interest in expanding their access to
markets and territory, with which in turn comes access to natural
resources, labor power, etc. This necessarily leads to
inter-imperialist struggle, the struggle to redivide and re-partition
the world and its markets, since the world is finite and the imperialist
hunger for cheap labour power, capital, and raw materials is limitless.

Inter-imperialist conflict, at its most extreme, takes the form of world
wars, which destroy huge quantities of productive capital and (in the
two examples so far) have led to the death of many millions of people.
However, world war is only the sharpest form of ‘politics by another
means’ that occurs in inter-imperialist competition. Proxy-wars,
annexation of territory, and expansionism are the constant foreign
policy of imperialist states. This is visible in Russia’s annexation of
Crimea and the ongoing warfare in Ukraine where Russian forces and
Russian-backed forces are struggling to overthrow the US-aligned
Ukrainian government. The struggle to repartition the world is also
evident in Syria where the US and US-aligned forces are attempting to
overthrow the Russia-supported Syrian government of Bashar al-Assad.

However, war and annexations are not the only manifestations of
inter-imperialist conflict over access to markets and resources,26
which plays out in many different ways, from free trade agreements, and
exclusive grants of mineral and oil rights, to access to shipping lanes
and economic sanctions. In fact, escalation to wars or proxy wars are
preceded by economic competition. For the purposes of this document, we
will consider competition in the natural gas industry. This competition
underlies both the conflicts in Syria and the Ukraine. Gazprom is a
major supplier of natural gas to Europe, and has a partial monopoly in
Eastern Europe. In 2016 Gazprom exported 179.3 billion cubic meters of
natural gas to Europe (a 12.5% increase over the previous year).27
Additionally, the Russian gas industry’s market share in Europe has
increased 23% in 2010 to over 34% in 2017.28 This has facilitated
closer economic ties between Russia and various European countries, and
threatens the US-led imperialist bloc’s dominance in the region.

To counteract this trend, the US worked with its allies in the Middle
East to expand existing gas and oil pipelines, connecting them to Turkey
and, through Turkey, to Europe. However, in 2009, Bashar al-Assad
refused to sign an agreement which would facilitate the expansion of a
natural gas pipeline from Qatar to Turkey, and the proposed expansions
to existing oil pipelines stalled for similar reasons.29 At the same
time, the US has been developing its internal natural gas industries and
constructing pipelines to export this gas to European markets. The US
and its allies have also imposed and continue to impose sanctions on the
Russian state and Russian corporations.

It was only after years of this sort of economic competition that the
contradictions between these rival imperialist powers sharpened to the
point of armed conflict.30 At present, this armed conflict is largely
conducted through proxies, but could eventually escalate to outright
conflict between these imperialist camps.

In this regard, it is important to note that Russia has the sixth
largest military in the world in terms of personnel (larger than even
the United States)31, and the third largest military by budget.32
Russia spends 4.9% of its GDP on its military every year, beating the
US’ 3.3% spending.33 Additionally, Russia has a huge reserve of
nuclear weapons from the cold war era. All of this constitutes a
significant military force. This large military, alongside the proxies
that Russia supports with arms deals, training, and the like, are used
by the Russian state in the military aspects of inter-imperialist
competition.

Conclusion

We have found it necessary to outline these points to elaborate on the
relevance of Lenin’s definition of capitalist-imperialism today. Absent
a genuine revolutionary force, there are three possibilities for
nation-states under capitalist-imperialism. They can be imperialist
powers (of one strength or another), comprador client-states, or failed
states subject to the plunder of competing imperialist powers. Failure
to understand Lenin’s ideas invariably leads to various
social-chauvinist positions, whether it’s ignoring the ways that the
Assad government oppresses the people of Syria and Kurdistan, or denying
that China’s export of capital to Africa is imperialist profiteering
built on national oppression and super-exploitation. This sort of
social-chauvinism also leads some to negate the increasingly fascist
character of the Indian state, which is currently leading a fairly open
war on its own people.

We have to be clear about the situation on a world level, and, as Lenin
put it, practice “what is most important, that which constitutes the
very gist, the living soul, of Marxism—a concrete analysis of a concrete
situation,”34 lest our theory cease to be a guide for action, a tool
for illuminating reality in a revolutionary way, and instead transform
into a stale dogma, recited to justify social-chauvinism,
imperialist-economism, and inactivity.

When analyzing the contemporary international situation it is necessary
to grapple with Lenin’s ideas and concretely apply them to particular
situations. If we do not we will be unable to distinguish comprador
forces, who are dominantly in the camp of the enemies of the people,
from revolutionary national forces, who can, in particular situations,
play a key role as part of a united front. We will be unable to
distinguish true proletarian internationalism, e.g. the assistance China
gave to the Korean people to counter US imperialism during the Korean
war, from imperialist aggression and proxy-wars, e.g. the Russian
support for the Assad government. As Lenin said in the preface to
Imperialism:

“Unless the economic roots of this phenomenon are understood and its
political and social significance is appreciated, not a step can be taken
toward the solution of the practical problem of the communist movement and
of the impending social revolution.”35

The question of “who are our friends, who are our enemies?” is one of
the most important questions we need to grapple with. It is our hope
that this short document will demonstrate that the Russian state is not
a friend of the people, but instead the representative of a bloc of
monopoly-capitalists itching to secure “a bigger piece of the pie”
through the incessant inter-imperialist struggle to redivide the world.

Updated 7/2/17: Fixed minor typos.

Updated 7/3/17: Corrected inaccurate statement describing Sberbank as
the 3rd largest bank in Europe. Sberbank is the 3rd largest bank in
Central and Eastern Europe, not Europe overall. Also fixed minor typos.